Posted by: Rob Hof on July 16, 2009

Search giant Google will report its second-quarter earnings shortly after 1 p.m. Pacific time today, at a time when investors will be wondering which way online advertising is going. While Google, as the dominant force in search advertising, show any signs that its recent slowdown in revenue growth will start reversing? Or will its doldrums continue in lockstep with the moribund economy?

I’ll be liveblogging the main analyst call and Webcast at 1:30 p.m. Pacific in a new post here, and there’s also a 3 p.m. Webcast Q&A with execs. You can listen to both Webcasts here. And my colleague Aaron Ricadela will post a full story later tonight.

Consensus expectations have Google earning $5.08 a share before special items, up 10% from a year ago. It’s expected to post gross revenues of $5.49 billion, or the more closely watched net revenues after payouts to Web site partners of $4.06 billion, up about 4% from a year ago but flat from the first quarter.

There are signs that spending on search ads, which analysts believe will bounce back faster than other kinds of advertising as the economy turns, have bottomed out. “We’ve hit a period of stability,” says Justin Merickel, VP of marketing and new product development for Efficient Frontier. The search marketing firm on July 13 reported that after a number of accelerating quarterly declines, search marketing spending is getting less bad, down 21% from a year ago compared with a 23% drop in the first quarter. Spending from the first to the second quarter fell only 3%.

At the same time, those numbers indicate little sign of a clear turnaround in search spending yet either. In any case, it’s best not to put too much money on this quarter’s results as a prediction of the rest of the year, since the second quarter is normally slow compared with the third and fourth quarters. And because Google commands upwards of 70% of search ad spending, its results may not reveal much about the prospects for Yahoo, which reports its second-quarter results next Tuesday, or for Microsoft’s struggling online operation. Both of them depend much more on display ads, whose growth has lagged search for a long time.

Still, a miss or a beat could easily move Google’s volatile shares, which were rising slightly in a mildly positive market today after a morning in the red. Its shares are up 36% on the year, more than double the Nasdaq’s 15% rise, so a miss seems more likely to upset investors than a beat will cheer them.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.